D E Master Blenders to take majority stake in Norwegian coffee company Kaffehuset Friele

Dutch coffee maker D.E Master Blenders yesterday said that it will raise its stake in Norwegian coffee company Kaffehuset Friele from 45 per cent to 90 per cent.

Amsterdam-based Master Blenders did not disclose the financial details of the transaction, but said that the remaining 10-per cent stake will remain in possession of the Friele family.

Master Blenders, owner of Douwe Egberts coffee, was this year acquired by German private investment firm Joh A Benckiser for $9.8 billion. (See: Germany's Joh A Benckiser to acquire D E Master Blenders 1753 for $9.8 billion)

Master Blenders had acquired a 45-per cent in Kaffehuset Friele in 1988 when coffee habits were developing rapidly in Norway.

Founded in 1799, Bergen-based Friele, now owned by the seventh generation of the Friele family, is the largest producer of coffee in Norway.

With a market share of 37 per cent, Friele, which buys its coffee beans from 10 different countries, mainly from Brazil and Kenya, is the main supplier of coffee for several grocery chains and to the catering industry.

Friele, whose brands include Kronekaffe and Café Noir, recorded sales of over 930 million Norwegian crowns ($158 million) last year, and operating earnings of 48 million crowns.

Kaffehuset Friele and Joh Johannson Kaffe dominate the Norwegian coffee market with a combined market share of 67 per cent.

Friele frokost kaffe (Friele breakfast coffee) is Norway's most popular coffee brand accounting for a 28 per cent market share followed by Joh Johannson's brands Evergood with 16 per cent and Ali with a 7 per cent.

Master Blenders said that Friele's Bergen-facility will become a 'Centre of Excellence' for the single-origin bean coffee production within Master Blenders' European operational platform.

''With its number-1 market position, strong brands and successful management, this acquisition fits perfectly in our global pure-play coffee and tea strategy to build on strong brands and strong market positions. It also creates further opportunities to leverage Friele's expertise in the rapidly growing single-origin bean coffee market,'' said Pierre Laubies, CEO of Master Blenders.

Master Blenders, which was spun out of Sara Lee last year, is an international coffee and tea company, with annual sales of €2.7 billion.

Its coffee and tea products are sold in more than 45 countries and 70 per cent of its revenue comes from markets where it holds No 1 or No 2 position.

It has an extensive range of 30 well-known tea and coffee brands. Its iconic Douwe Egberts brand, founded in the Netherlands in 1753, is the number one coffee brand in the Netherlands and Belgium, and has solid market positions in the UK and Hungary. Pilão is the number one coffee brand in Brazil, and Merrild is the favourite in Denmark.

In the Netherlands, Czech Republic, Hungary and Denmark, its Pickwick tea is the number one brand while Hornimans is the number two choice in Spain.